The present invention relates to account management systems and methods and, more particularly, to account rollover systems and methods.
There has been a phenomenal growth trend in the retirement savings industry. This growth trend is primarily due to the shift in the nature of retirement savings, which began with the advent of the 401(k) plan and introduction of Investment Retirement Accounts (“IRAs”) in the early 1980s, and continues with the desire of workers to control their retirement destiny. Today, nearly 80% of eligible employees in the United States participate in their companies' 401(k) plans, and over 30% of United States households own IRAs. An employee departing a company is typically faced with the question how to manage his or her employer sponsored retirement savings account. Although, there are a number of ways for handling this situation, the best solution is typically to rollover the account to an IRA because IRAs provide greater flexibility in how a consumer may manage their retirement investment.
Job mobility and retirement trends are spurring an increase in the number of consumers looking to roll over assets, such as from an employer-sponsored 401(k) plan. The increase is predicted to grow the industry to the trillions of dollars mark in the near future. The needs of this industry and the needs caused by its growth are not being sufficiently met by known technology. Typically, financial institutions offering rollover solutions do not have access to a stream of consumers who are seeking rollover solutions and do not have access to an environment that allows them to differentiate their products and services from those of their competitors. Also, consumers typically find such decisions difficult, in part due to the lack of information and difficulty of finding information regarding possible options in a single location. Moreover, existing systems supporting this industry includes pervasive inefficiencies that significantly hamper the processing of asset and data transfer between financial institutions, increasing the time and costs associated with establishing new IRA accounts. One stumbling block that is often experienced by financial institutions is that a consumer cannot directly interact with a single entity to complete a rollover because transfer of custody of the assets to the rollover account typically requires interaction with the employer who sponsored the consumer's retirement saving account and may require interaction with the financial institution who is the current custodian of the retirement savings account.
Techniques for transacting business between consumers and financial institutions and between employers and financial institutions have been developed that use the Internet. These techniques, however, do not address the needs of the rollover retirement account industry, such as the need to simplify the rollover process, the need for a competitive environment for rollover transactions, the need to streamline the rollover process, or other related needs.
In addition, even though both the Internet and employer sponsored savings plans have existed for at least over ten years, to date, an adequate solution for the needs of the retirement saving industry has not been realized.